Asean IT spend to top US$13B

Tech spending by small and midsize businesses in six of Asean's largest markets are expected to grow by 15 percent in 2008, new study reveals.
Written by Lynn Tan @ Redhat, Contributor

Small and midsize businesses (SMBs) across six key markets in Asean are expected to invest more than US$13.6 billion to boost their IT infrastructure in 2008, according to a new analyst report.

In its latest study released today, AMI-Partners said that SMBs in six of the largest markets in the region--as determined by their GDP (gross domestic product)--are projected to increase their IT expenditure by 15 percent next year. The markets are Indonesia, Thailand, Malaysia, Singapore, Philippines and Vietnam.

SMB IT spending in these six markets are projected to hit US$12 billion this year, half of which will be spent on technologies such as desktop and portable PCs, peripherals, servers, printers and handheld devices.

Jason Loh, a Singapore-based senior research analyst at AMI-Partners, said in a statement that in terms of IT spending, Vietnam, Indonesia and the Philippines will be the fastest growing SMB markets in the Asean region, with each country growing its IT spend by at least 17 percent in 2008.

"These three countries will surpass IT growth in China, which is estimated at 15 percent in 2008," he added.

The lion's share of expenditure in the three countries will go toward boosting networking infrastructure and IT security in the next 12 months, said the research house.

"The last few years have seen Asean countries investing more to build better IT infrastructures and [adopt] legal policies to support business growth," Loh said. "In 2008, Asean will see about 66,000 new SMBs being born, [and they] will contribute to [the] IT spending."

This is because the majority of Asean SMBs see the need for data and network security, backup and disaster recovery, and high-speed broadband, he noted.

All eyes on Vietnam
But Vietnam is "the key country to watch", noted AMI-Partners.

According to the research house, Vietnam has seen an "influx of vendors and investors", many of whom are attracted by the country's improved business climate, growth of SMBs' overseas investments, and the rising demand for IT products and services.

"Despite low total spending as compared to other Asean countries, SMBs in Vietnam have seen the fastest growth in almost all types of IT spend," Loh said. "For the past three years, the growth in IT spend in Vietnam has been more than 24 percent per annum."

Loh also noted that SMBs in Indonesia are expected to be "one of the biggest spenders on IT this year", growing by 20 percent over 2006. The total IT spending of all SMBs in Indonesia is expected to rise to US$3.5 billion in 2008, from US$2.5 billion in 2006.

"Indonesian SMBs will invest as much as US$1 billion on PCs and PDAs alone this year, [and] the major contribution will come from manufacturing and retail sectors," he added.

Although IT spending in mature Asean economies, such as Singapore, Malaysia and Thailand, will grow at a slower pace, specific areas like the Internet, IT security and software will gain more traction in these countries, the report noted.

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